Cloud9 Analytics

The next bright shiny objects

I was so looking forward to getting the Facebook IPO out of the way and then splat, like a ripe tomato in the kisser, we have to learn that the underwriters might not have shared some pre-IPO information transparently. Enough already! Bankers appear to be tone deaf to the fallout from their gross behavior. If you want an historical comparison I think you need to go all the way back to the Renaissance and the Borgia popes. But no matter.

With Facebook’s more or less successful public launch I hope we can turn our attention to other areas of CRM and the front office. It might seem funny to hear but I think the IPO signals the end of the social era. With social so prominent you might wonder how anyone can call it over but that’s exactly the point. Social has advanced very rapidly from the periphery of technology and business to be front and center.

So it’s no longer a disruptor, either you have it or you need it but there’s no longer any doubt about it, which means its over just like the information age or the machine age or whatever age you want. An age ends when it becomes part of the fabric. Next!

And while we’re at it, let’s clear the decks and add mobility and cloud computing to the list. The same story holds there you’ve had more than a decade to discover the cloud and its predecessors and we can say much the same about mobile. The interest in all these technologies today is not so much that the technologies are now ready for prime time. It’s that the majority is finally disposed to or resigned to (take you pick) their reality as business essentials. That’s good for my business because there are lots of companies trying to get the crash course without crashing, if you know what I mean.

So let’s talk about what’s next because there are many candidates. My favorite is the growing need for communications capability within the CRM suite. I am thinking about voice over IP for all, video calling embedded in apps and mobility, any time and anywhere. Social is nice and mobile has a place and we have analytics to tame big data but the emerging issue is how to communicate directly one on one with customers in the middle of a front office business process.

Old reliable telephone service is less reliable today because there are so many phones that aren’t nailed down. The infrastructure might be good but few of us sit at a desk these days, more likely we’re walking to another meeting, in a car or seat 15B on an unexpected trip to customerville. But what if that seat was prohibitively expensive or what if, due to all the connections, it was faster to walk? What if your desk is your lap? It’ll happen, which is why the need for really good communications embedded in our CRM apps. Unified communications is the most important solution we’re all ignoring these days.

You’ve heard me rant about unified communications before and I will continue because it’s infinitely easier to rant than to build software. I’m used to it. I spent years talking about social before it took off and I figure we’re three to five years away from taking unified communications seriously. But last week at least one company showed it was thinking along the same general lines of communicating. Salesforce announced at Cloudforce, London that it was offering two new products that foster communication, Chatter Messenger and Chatter Screensharing.

Don’t let the uninspiring names fool you, each product places Salesforce on a continuum that might lead to voice communications eventually. If nothing else, each tries to fill a communication void found across the front office today. They’re just what they seem, an instant messenger tool to augment Chatter and a way to share a computer screen across the Internet.

With every similar iteration CRM gets closer to the customer, closer to being in the moment when it counts and that’s good. I expect Salesforce to let these new products equilibrate with the customer base and then each will be made available to end customers.

Beyond these new technologies, I think there are many tools that have not received the attention they deserve because they’ve been living in a social shadow. For instance, a lot of work has been done bringing analytics to the sales process where it can do a world of good but we don’t hear much about it. Maybe it’s not as sexy as social but it’s very important.

Companies like Cloud 9 have been busy building really good analytic models for pipeline management and forecasting. They’re doing well today and I expect demand for these solutions will only increase for one simple reason. There’s too much to manage in a sales department today and managing without analytics is next to impossible.

Sales people and their managers have exhausted the weekly spreadsheet report and a good deal more quantitative analysis is the only thing that’s going to save selling. We’ve tried methods, fancy tools, carrots and sticks all with about the same results. The next approach to selling has to be using digital marketing tools to generate sales ready leads and quantitative methods to manage an integrated marketing-sales pipe and the forecast.

Sales people up and down the ladder have resisted this kind of consolidation before but this time is different. We’re coming out of a recession where demand has been week for years and sales people who want to resist quantitative methods have been worn down.

So communications and analytics; those are my two candidates for hyper-exposure a la Facebook. And I think the smart money is already gravitating in those directions.

Not bad for a recession, that’s what I say. The news from Cloud9 Analytics and Mayfield Fund says a lot about a lot. First, the nearly moribund venture capital industry is showing signs of life after a couple of long, quiet years.

Last year, 2009, was the worst venture capital year since 1997 measured by the amount of cash invested (about $17.8 billion) and cash raised (about $15.2 billion). That’s right in 2009 the industry invested more than it raised and that hasn’t happened in a long, long time. For a benchmark, in 2000 the industry invested just over $100 billion and then you know what happened. A more typical annual tally in the last decade was between $20 billion and $30 billion. So the fact that Cloud9 was able to raise $8 million is very interesting news.

Of course, a C-round is an important marker because it means the company is maturing and becoming ready for a liquidity event. The short event horizon is a sign that the VC’s a stepping carefully into the water again. When we see a stampede to A round companies it will be a different story.

So, what about Cloud9 makes it appealing? I think a couple of things. First, they offer SaaS based analytics but that’s not enough these days. SAS got into that market a month ago and they’re the gold standard and there are many others doing something with analytics as a SaaS service. But the thing I like about Cloud9 is that they’re articulating, or starting to, a vision of more strategic use of analytics for the small business through the small enterprise.

SAS can be excused from this conversation, but there are a lot of analytics vendors out there that haven’t gotten beyond the idea of selling people on the tactical use of analytics.

So this announcement has legs and it shows hope that the venture capital industry in resurgent and that analytics is gaining more traction where it’s needed.

Incidentally, the hot markets for venture funding, in order are Biotech, Software, Industrial/Energy, and Medical Devices according to PriceWaterhouseCoopers and the National Venture Capital Association who compiled the data referenced here.

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Beagle Research Group, LLC is a CRM analyst firm founded in 2004. We perform market research for vendors and advise end users in CRM selection, deployment and use. We also publish a steady stream of analysis on many of the industry’s most popular topics as well as emerging trends. For example, one of our core pursuits is researching emerging companies to understand current innovation trends. This research informs the advice we give our clients and readers.